Discover our upstream and downstream technical journals

The council of Austin, Texas voted to up its solar procurement plans to 450MW, on Thursday. Utility Austin Energy meanwhile is eyeing post-investment tax credit (ITC) savings by owning its solar assets itself.

The council had been discussing a doubling of the existing 300MW goal to 600MW by 2017 before settling on a compromise deal proposed by Mayor Steve Adler. The additional 150MW will be procured by the end of 2019.

Documents from the meeting put the annual cost of procuring up to 650MW at US$44 million valuing the 25-year power purchase agreements at US$1.1 billion. Up to 450MW has been costed at US$17 million a year and US$425 million in total.

Concerns over the impact on energy bills resulted in a 1% increase cap on consumer bills. A provision has been attached to the procurement stating that it must be “available and affordable”.

A presentation by Austin Energy also dismissed the impact of the ITC's step-down from 30 to 10% at the end of 2016.

“The ITC drop creates two opportunities for AE: take advantage of potentially depressed market; take advantage of benefits of moving to an ownership model.”

The company said it had been offered power from post-ITC cut projects for less than 2% more than the cost of pre-2016 projects. With demand reduced after 2016, AE believes it could benefit from lower procurement costs if it switched from a PPA model to owning the plants itself and offsetting the loss of the ITC with lower build costs.